After a 250 basis point tax cut and improving economic conditions have led to increased pressure on gold prices. It is happening both in the physical and futures market. The precious yellow metal is trading down by nearly 5 percent from its price before the announcement of the Union Budget 2021.
As per finance and economic analysts, the gold may further suffer some more rising yields and better than expected success in vaccination drive. As it will lead money out of the non-yielding bullion (gold bars). However, support may be provided by low-level buying and wedding demand.
Following a dramatic four-day fall, gold prices today struggled to inch higher. As on Multi Commodity Exchange (MCX), the gold futures were up 0.3 percent to Rs 46,857 per 10 gram while silver rose 0.6 percent to Rs 67,239 per kg.
Previously, gold had dropped over Rs 1000 or 2 percent per 10 gram while silver had dipped Rs 1500 or 2.1 percent per kg. The cut in the import duty and the recent fall in global rates in the Budget has pushed down the gold rates in India. The rates have dropped to near seven-month-lows in the country.
Back in August 2020, gold had hit a record high of Rs 56,200 per 10 gram. There was a rise in the gold prices in global markets. However, it still remained below the key psychological $1,800 level.
Speaking of Spot gold, it added 0.2 percent at $1,795.30 an ounce after slumping over 2 percent previously. The dent in the gold’s demand has been because of a stronger US dollar and rising US Treasury yields.
Post the GameStop-style retail, the silver prices have steeply slumped in the global market. The retail frenzy sent the prices of silver to their highest level in nearly eight years. As of Monday, silver rates were $30.03, while Spot silver fell 0.1 percent to $26.27 per ounce.
Other precious metals including platinum lost 0.1 percent at $1,095.93 per ounce, while palladium rose by 0.6 percent to $2,296.23.